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Oil dips to $121 as reserves grow | Oil dips to $121 as reserves grow |
(30 minutes later) | |
Oil prices fell by more than $2 a barrel on Wednesday as latest figures showed US petrol reserves had risen more than expected. | Oil prices fell by more than $2 a barrel on Wednesday as latest figures showed US petrol reserves had risen more than expected. |
Analysts said the increase suggested demand for oil from developing economies was slowing. | Analysts said the increase suggested demand for oil from developing economies was slowing. |
In London, Brent crude fell $2.82 to $121.76, while in New York, light, sweet crude dipped as low as $121.84. | In London, Brent crude fell $2.82 to $121.76, while in New York, light, sweet crude dipped as low as $121.84. |
The price of oil has been falling in the last two weeks since it hit a record of $135 a barrel on 22 May. | The price of oil has been falling in the last two weeks since it hit a record of $135 a barrel on 22 May. |
"The days of establishing new record prices appear to be temporarily over," said Victor Shum, an energy analyst from consultancy Purvin and Gertz. | "The days of establishing new record prices appear to be temporarily over," said Victor Shum, an energy analyst from consultancy Purvin and Gertz. |
Subsidies cut | |
Rising fuel prices in fast-growing economies such as India may cause demand to fall, analysts suggest. | |
The governments of India and Malaysia effectively increased fuel prices on Wednesday by reducing subsidies on oil. | |
In India, the price of fuel will rise by 10%, and in Malaysia, petrol prices will increase by 40%. | |
As well as indications of falling demand for the commodity, the price of oil has also been falling as the US dollar has strengthened. | As well as indications of falling demand for the commodity, the price of oil has also been falling as the US dollar has strengthened. |
A weaker dollar has made commodities a more attractive investment. | A weaker dollar has made commodities a more attractive investment. |
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